We’ve constantly been sharing a list of our recent reads in our weekly emails for The Good Investors.
Do subscribe for our weekly updates through the orange box in the blog (it’s on the side if you’re using a computer, and all the way at the bottom if you’re using mobile) – it’s free!
But since our readership-audience for The Good Investors is wider than our subscriber base, we think sharing the reading list regularly on the blog itself can benefit even more people. The articles we share touch on a wide range of topics, including investing, business, and the world in general.
Here are the articles for the week ending 5 April 2020:
1. Message from Ser Jing’s friend
Ser Jing’s friend recently sent a wonderful text message on a list of wholesome activities we can all do during these difficult times to still add grace, beauty, purpose, and meaning to our lives:
– Picking up a book that you have been wanting to read
– Taking this period of time to rest and re-calibrate yourself
– Spending quality time and doing stuffs for your loved ones
– Taking up online courses. Think Coursera and etc
– Starting up your own side line business
– Developing a new skill or hobby
– Practicing meditation, yoga and journalism to master your inner thoughts and emotions [Ser Jing meditates regularly]
– Spending some time alone in nature
– Getting in touch with your friends
– Spend time reflecting
2. A Coronavirus Fix That Passes the Smell Test – Michael Lewis
Encourage everyone in the world with access to the internet to report whether they can or cannot smell. Make it easy for them to do so. Find widely admired people with big social-media followings to make short videos on the subject — at the bottom of which there’d be a simple button that allows anyone watching to report their sense of smell. Go viral with the virus [COVID-19]. Before long you’d have a pile of data that smart analysts could use to map it, and evaluate its risks. The results might not be perfect, but they were far better than what we have now in any rich country and far better than what they might ever have in countries with fewer resources.
I love this idea. Hancock is well on his way to building an organization to make it happen — the website is sniffoutcovid.org. He is in the market for both widely admired people and data scientists. Here’s to hoping he finds them before my father calls me to say that he can no longer smell his Burgundy.
3. Great Love & Great Suffering – Josh Radnor
I have noted in myself a kind of reflexive optimism (i.e. “This is going to be okay,” “We’ll get through this,”) of which I’m becoming suspicious. Do I just feel that way because I’ve been inoculated by my privilege? Surely this is going to be calamitous for many people – far beyond the sick and the dying – and I don’t want to turn a blind eye toward that suffering: the suddenly unemployed and homeless, the relapsing addict and those that love them, those trapped in abusive and unsafe homes, etc.
It feels like this moment is asking me to grow up, to stop relying on false-hope granting platitudes and accept that pain, suffering, and grief are part of the birthright of being a human being. I say that with the full knowledge and deep belief that love, joy, laughter, and art are also part of that birthright. Light and shadow are inextricably bound up with each other and it’s naïve to think that darkness can be vanquished or banished in favor of everlasting light. That’s magical thinking of a kind to which I refuse to subscribe.
4. The Greatest Investment Quotes of All Time – Nick Maggiulli
“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.”
-Charlie Munger, Interview with BBC
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
– Paul Samuelson
“I tell my father’s story of the gambler who lost regularly. One day he hears about a race with only one horse in it, so he bet the rent money. Halfway around the track, the horse jumped over the fence and ran away.”
-Howard Marks, The Most Important Thing
5. The Corona Crisis vs. The Great Depression – Ben Carlson
However, there are a number of differences between 1929-1932 and its aftermath and the current situation.
The Fed. The Federal Reserve was still relatively new during the Great Depression, having been founded just 16 years prior. Not only did they pour gasoline on the fire during the speculative period leading up to the crash, but they did next to nothing in trying to stop the crisis as it was unfolding.
John Kenneth Galbraith once wrote, “The Federal Reserve Board in those times was a body of startling incompetence.”
In the current crisis, the Fed has acted fast and they’ve gone big. Central banks around the globe have pumped liquidity into the system to make sure the plumbing of the financial markets continues to function.
This was not happening during the Great Depression and it’s one of the reasons there was a run on the banks and a huge number of bank failures.
Government Spending. During a severe economic contraction, individuals and corporations spend less money so it’s typically up to the government to make up for this shortfall.
During the Great Depression, they did the opposite. Republicans and Democrats alike sought to balance the budget and cut spending. Even in 1932, at the depths of the depression, they wanted to shrink government spending by 25%.
Today, we’re getting $2 trillion in fiscal stimulus rescue funds plus another $4 trillion in loans from the Fed. It’s likely we’ll need even more government spending depending on how long it takes to beat the virus.
6. Why does Covid-19 get the blame when Eagle Hospitality Trust’s woes predate it? – Marissa Lee
UC’s fixed payments were supposed to account for 66 per cent of EHT’s projected rental income in 2020, though the US lodging market began to weaken in the second half of last year. EHT’s revenue for 2019 came in 10 per cent lower than forecast. On Feb 17, 2020, a week before the US confirmed its first case of local Covid-19 transmission, UC amended the master lease agreements to allow EHT to receive more rent from any hotels that produce excess cash ow, to make up for shortfalls in any underperforming hotels.
The master lease agreements also formed the basis for EHT’s adopted valuations of its hotels.
According to EHT’s oer document, UC was required to hand over a US$43.7 million security deposit to EHT during the IPO, equivalent to nine months of fixed rent. UC funded US$23.7 million in cash, and indicated in the offer document that it would provide the balance of US$20 million by way of a letter of credit on or around EHT’s listing on May 24, 2019.
After EHT’s IPO, most investors assumed that the full US$43.7 million was safely in escrow, until they were told differently on March 19, 2020.
What they learnt is that UC had used US$5 million in cash to top up its security deposit to US$28.7 million, though it still had not managed to procure a letter of credit for the remaining US$15 million of the US$43.7 million.
7. The Shock Cycle – Morgan Housel
Then you ignore good news because you’re once bitten, twice shy. Avoiding further downside becomes such a focus that you lack the mental bandwidth to even recognize good news.
Then you deny good news. You’re so attuned to risk that you reflexively think good news must be wrong or out of context. Anyone promoting good news is criticized by the masses, who enjoy safety in numbers.
Then you realize you missed the good news. In hindsight you realize things turned a corner while people were most certain about how bad it was. You look back and can’t believe how obvious it was that people were too pessimistic, and can’t believe clear the signs of improvement were.
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